imported>Doug Williamson |
imported>Doug Williamson |
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| ''Financial reporting - primary statements.''
| | (CCIRS). |
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| (BS).
| | A longer term derivative contract which is used to transform longer term interest rate-related obligations or assets in one currency, into another currency. |
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| | For example, a GBP-based firm with a USD borrowing might use a CCIRS to transform the USD borrowing into a synthetic GBP borrowing. |
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| == What is a balance sheet? ==
| | The concept of a CCIRS was developed from the (same-currency) interest rate swap market, which most commonly swaps fixed and floating interest rate streams in the same currency. |
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| | Same currency interest rate swaps exchange interest flows in the same currency (but calculated on different bases). |
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| One of the primary statements of financial accounts.
| | Cross currency interest rate swaps exchange interest flows denominated in different currencies. |
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| Also known as the Statement of financial position.
| | Cross currency interest rate swaps usually exchange currency principal amounts at their maturity (unlike same-currency interest rate swaps). |
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| The balance sheet summarises the assets, liabilities and shareholders’ funds at the balance sheet date.
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| Shareholders' funds are also known as 'equity'.
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| Under the 'double entry' accounting convention, assets are Debits (DR) and liabilities and shareholders' funds are Credits (CR).
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| The standard UK balance sheet presentation for external reporting is Net Assets = Shareholders' Funds.
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| The Net assets part of the balance sheet is sometimes called the 'top half'.
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| The Shareholders' funds part being the 'bottom half'.
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| For example in summary:
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| TOP HALF:
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| Assets 100 DR
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| - Liabilities (20) CR
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| = Net assets 80 DR
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| BOTTOM HALF:
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| Shareholders’ funds 80 CR
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| (Total shareholders' funds being detailed in turn into share capital and reserves. Assets and liabilities also being appropriately listed in fuller detail.)
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| The balance sheet equation in summary, using the convention above, is 80 = 80.
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| == Alternative presentations of balance sheets ==
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| There are many other ways to present this information in other balance sheet formats.
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| Alternative balance sheet conventions maintain the balanced/double-entry principle, but may show for example:
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| Total Assets = Total Liabilities + Shareholders' Funds; OR
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| Total Assets = Total Liabilities + Equity
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| Presented on this alternative basis (assets = liabilities) and using the same summary figures as before:
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| TOP HALF:
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| Total assets 100 DR
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| BOTTOM HALF:
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| Total liabilities 20 CR
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| + Equity 80 CR
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| = Total liabilities & equity 100 CR
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| The same balance sheet information has now been presented as 100 = 100, using the alternative convention.
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| The Total liabilities of 20 CR are now presented in the bottom half of the balance sheet (rather than in the top half as before).
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| Total liabilities & equity of 100 CR means the same thing as Total liabilities & shareholders' funds of 100 CR.
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| (Equity and Shareholders' funds being alternative names for the same item.)
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| The choice of presentation and terminology will depend on the purposes for which the balance sheet information is required, together with any rules or conventions applying to the entity's external reporting.
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| | Also known as Currency interest rate swap or Foreign currency swap. |
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| == See also == | | == See also == |
| * [[Assets]] | | * [[Asset-based swap]] |
| * [[Balance sheet exposure]]
| | * [[Currency risk]] |
| * [[Bookkeeping]]
| | * [[Currency swap]] |
| * [[Cashflow statement]]
| | * [[GBP]] |
| * [[Contingent assets]]
| | * [[Interest rate swap]] |
| * [[Contingent liabilities]]
| | * [[Swap]] |
| * [[Credit balance]]
| | * [[Synthetic]] |
| * [[Current/non-current method]]
| | * [[USD]] |
| * [[Debit balance]]
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| * [[Double entry]]
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| * [[Equity]] | |
| * [[Event after the balance sheet date]] | |
| * [[Financial reporting]] | |
| * [[Financial statements]] | |
| * [[Income statement]] | |
| * [[Liabilities]] | |
| * [[Off balance sheet]] | |
| * [[Off balance sheet finance]]
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| * [[Post balance sheet event]]
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| * [[Primary statements]]
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| * [[Profit and Loss account]]
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| * [[Share capital]]
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| * [[Shareholders’ funds]]
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| * [[Short term]]
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| * [[Statement of financial position]]
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| * [[Window-dressing]]
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| ===Other links===
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| [http://www.treasurers.org/node/5176 Is your balance sheet sound? The Treasurer, 2009]
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| [[Category:Accounting,_tax_and_regulation]]
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(CCIRS).
A longer term derivative contract which is used to transform longer term interest rate-related obligations or assets in one currency, into another currency.
For example, a GBP-based firm with a USD borrowing might use a CCIRS to transform the USD borrowing into a synthetic GBP borrowing.
The concept of a CCIRS was developed from the (same-currency) interest rate swap market, which most commonly swaps fixed and floating interest rate streams in the same currency.
Same currency interest rate swaps exchange interest flows in the same currency (but calculated on different bases).
Cross currency interest rate swaps exchange interest flows denominated in different currencies.
Cross currency interest rate swaps usually exchange currency principal amounts at their maturity (unlike same-currency interest rate swaps).
Also known as Currency interest rate swap or Foreign currency swap.
See also
